diff --git a/pkg/operator/configobserver/cloudprovider/observe_cloudprovider.go b/pkg/operator/configobserver/cloudprovider/observe_cloudprovider.go
index 90b3195789..6499296565 100644
--- a/pkg/operator/configobserver/cloudprovider/observe_cloudprovider.go
+++ b/pkg/operator/configobserver/cloudprovider/observe_cloudprovider.go
@@ -77,6 +77,7 @@ func (c *cloudProviderObserver) ObserveCloudProviderNames(genericListers configo
 		return observedConfig, errs
 	}
 	if err != nil {
+		errs = append(errs, err)
 		return previouslyObservedConfig, errs
 	}
 
diff --git a/pkg/operator/configobserver/proxy/observe_proxy.go b/pkg/operator/configobserver/proxy/observe_proxy.go
new file mode 100644
index 0000000000..53988d6b8d
--- /dev/null
+++ b/pkg/operator/configobserver/proxy/observe_proxy.go
@@ -0,0 +1,88 @@
+package proxy
+
+import (
+	"reflect"
+
+	"k8s.io/apimachinery/pkg/api/errors"
+	"k8s.io/apimachinery/pkg/apis/meta/v1/unstructured"
+
+	configv1 "github.com/openshift/api/config/v1"
+	configlistersv1 "github.com/openshift/client-go/config/listers/config/v1"
+	"github.com/openshift/library-go/pkg/operator/configobserver"
+	"github.com/openshift/library-go/pkg/operator/events"
+)
+
+type ProxyLister interface {
+	ProxyLister() configlistersv1.ProxyLister
+}
+
+func NewProxyObserveFunc(configPath []string) configobserver.ObserveConfigFunc {
+	return (&observeProxyFlags{
+		configPath: configPath,
+	}).ObserveProxyConfig
+}
+
+type observeProxyFlags struct {
+	configPath []string
+}
+
+// ObserveProxyConfig observes the proxy.config.openshift.io/cluster object and writes
+// its content to an unstructured object in a string map at the path from the constructor
+func (f *observeProxyFlags) ObserveProxyConfig(genericListers configobserver.Listers, recorder events.Recorder, existingConfig map[string]interface{}) (map[string]interface{}, []error) {
+	proxyLister := genericListers.(ProxyLister)
+
+	errs := []error{}
+	prevObservedProxyConfig := map[string]interface{}{}
+
+	// grab the current Proxy config to later check whether it was updated
+	currentProxyMap, _, err := unstructured.NestedStringMap(existingConfig, f.configPath...)
+	if err != nil {
+		return prevObservedProxyConfig, append(errs, err)
+	}
+
+	if len(currentProxyMap) > 0 {
+		unstructured.SetNestedStringMap(prevObservedProxyConfig, currentProxyMap, f.configPath...)
+	}
+
+	observedConfig := map[string]interface{}{}
+	proxyConfig, err := proxyLister.ProxyLister().Get("cluster")
+	if errors.IsNotFound(err) {
+		recorder.Warningf("ObserveProxyConfig", "proxy.%s/cluster not found", configv1.GroupName)
+		return observedConfig, errs
+	}
+	if err != nil {
+		errs = append(errs, err)
+		return existingConfig, errs
+	}
+
+	newProxyMap := proxyToMap(proxyConfig)
+	if len(newProxyMap) > 0 {
+		if err := unstructured.SetNestedStringMap(observedConfig, newProxyMap, f.configPath...); err != nil {
+			errs = append(errs, err)
+		}
+	}
+
+	if !reflect.DeepEqual(currentProxyMap, newProxyMap) {
+		recorder.Eventf("ObserveProxyConfig", "proxy changed to %q", newProxyMap)
+	}
+
+	return observedConfig, errs
+}
+
+func proxyToMap(proxy *configv1.Proxy) map[string]string {
+	proxyMap := map[string]string{}
+
+	if noProxy := proxy.Spec.NoProxy; len(noProxy) > 0 {
+		proxyMap["NO_PROXY"] = noProxy
+	}
+
+	if httpProxy := proxy.Spec.HTTPProxy; len(httpProxy) > 0 {
+		proxyMap["HTTP_PROXY"] = httpProxy
+	}
+
+	if httpsProxy := proxy.Spec.HTTPSProxy; len(httpsProxy) > 0 {
+		proxyMap["HTTPS_PROXY"] = httpsProxy
+	}
+
+	return proxyMap
+}
diff --git a/pkg/operator/configobserver/proxy/observe_proxy_test.go b/pkg/operator/configobserver/proxy/observe_proxy_test.go
new file mode 100644
index 0000000000..4909ea8fc2
--- /dev/null
+++ b/pkg/operator/configobserver/proxy/observe_proxy_test.go
@@ -0,0 +1,91 @@
+package proxy
+
+import (
+	"reflect"
+	"testing"
+
+	metav1 "k8s.io/apimachinery/pkg/apis/meta/v1"
+	"k8s.io/client-go/tools/cache"
+
+	configv1 "github.com/openshift/api/config/v1"
+	configlistersv1 "github.com/openshift/client-go/config/listers/config/v1"
+	"github.com/openshift/library-go/pkg/operator/events"
+	"github.com/openshift/library-go/pkg/operator/resourcesynccontroller"
+)
+
+type testLister struct {
+	lister configlistersv1.ProxyLister
+}
+
+func (l testLister) ProxyLister() configlistersv1.ProxyLister {
+	return l.lister
+}
+
+func (l testLister) ResourceSyncer() resourcesynccontroller.ResourceSyncer {
+	return nil
+}
+
+func (l testLister) PreRunHasSynced() []cache.InformerSynced {
+	return nil
+}
+
+func TestObserveProxyConfig(t *testing.T) {
+	configPath := []string{"openshift", "proxy"}
+
+	tests := []struct {
+		name          string
+		proxySpec     configv1.ProxySpec
+		expected      map[string]interface{}
+		expectedError []error
+	}{
+		{
+			name:          "all unset",
+			proxySpec:     configv1.ProxySpec{},
+			expected:      map[string]interface{}{},
+			expectedError: []error{},
+		},
+		{
+			name: "all set",
+			proxySpec: configv1.ProxySpec{
+				HTTPProxy:  "http://someplace.it",
+				HTTPSProxy: "https://someplace.it",
+				NoProxy:    "127.0.0.1",
+			},
+			expected: map[string]interface{}{
+				"openshift": map[string]interface{}{
+					"proxy": map[string]interface{}{
+						"HTTP_PROXY":  "http://someplace.it",
+						"HTTPS_PROXY": "https://someplace.it",
+						"NO_PROXY":    "127.0.0.1",
+					},
+				},
+			},
+			expectedError: []error{},
+		},
+	}
+	for _, tt := range tests {
+		t.Run(tt.name, func(t *testing.T) {
+			indexer := cache.NewIndexer(cache.MetaNamespaceKeyFunc, cache.Indexers{})
+			indexer.Add(&configv1.Proxy{
+				ObjectMeta: metav1.ObjectMeta{Name: "cluster"},
+				Spec:       tt.proxySpec,
+			})
+			listers := testLister{
+				lister: configlistersv1.NewProxyLister(indexer),
+			}
+			eventRecorder := events.NewInMemoryRecorder("")
+
+			initialExistingConfig := map[string]interface{}{}
+
+			observeFn := NewProxyObserveFunc(configPath)
+
+			got, errorsGot := observeFn(listers, eventRecorder, initialExistingConfig)
+			if !reflect.DeepEqual(got, tt.expected) {
+				t.Errorf("observeProxyFlags.ObserveProxyConfig() got = %v, want %v", got, tt.expected)
+			}
+			if !reflect.DeepEqual(errorsGot, tt.expectedError) {
+				t.Errorf("observeProxyFlags.ObserveProxyConfig() errorsGot = %v, want %v", errorsGot, tt.expectedError)
+			}
+		})
+	}
+}